Friday, September 07, 2007

The Economy of the iPhone, or How Apple is Going to Take Over the World Part IV

Well, now it comes down to it, and I'd better have a spectacular point after 4 posts on the same (sort-of) topic, right?

Actually, it's my blog, and I can just leave you hanging here if I want.

Based on the number of idiotic comments I've gotten so far (and deleted, after a sound nosefucking, as promised), there probably isn't much point in continuing this.

But there are a few out there who deserve, I suppose.

I am going to assume that all of you still reading can remember a few points at a time. The point I am referencing is that the iPhone maneuver is all about market share. Steve wants all of it for the iPhone. Why? Very simple: he wants everyone in the world to have an iPhone on the day that he gives the big middle finger to ATT, Verizon, Sprint, T-Mobile . . . pretty much every player in that market.

What is going to happen? Duh! The iPhone is an internet appliance + music player that happens to place calls on the remains of one of Steve's most hated monopolistic enemies. Why partner with ATT? Is it only poetic justice?

No. He tried to go with Verizon because they have a better data network (and don't be fooled, moo-cow, the iPhone is all about data), but V stiffed him.

In all, that's ok. It's almost better. VoIP is gaining ground. WiFi is gaining ground. It won't be long before SIP-based VoIP solutions are readily available for iPhone, and wireless data networks are ubiquitous. Our spineless consumer society will demand that every square inch of the US be covered in "free" 802.11 wireless bliss. Of course, we'll pay ten times what it's worth in taxes, and the solution will lack any semblance of security, but that's what we will want: nothing at the cost of everything.

In the mean time, cell-cos will still be gouging our bums with contracts. Then one day, Steve will get up on the stage at the Moscone Center and tell everyone to cancel their service. The iPhone is a fully functional VoIP phone. All you need to do is update iTunes and sync your phone. Unlimited voice and data on the network of your choice.

The cell-cos will be brought to their financial knees in a matter of hours. Service contracts will die in a flash. You will pay only for the minutes you use (emergency, most likely), and the prices will be dirt cheap. One more thing: those iPod Touches? Sync those. They are now phones.

Apple has been screwing with every cell-co it touched. ATT was the first one desperate enough to bite. Apple's taking a cut of the subscription, mandating policy, requiring system upgrades, basically doing everything Apple can to make them miserable.

Now this price cut has flooded ATT with support calls, service rebates, everything to keep dumbasses from cancelling service contracts that they can still get out of. You think Steve doesn't know this? Apple isn't repaying ATT's losses. Apple doesn't give a shit about credit card companies that offer price protection plans (AMEX is bitching really loud right now. No comment from Cupertino). Apple has its money from the only remaining child of the company that Steve has hated for 30 years. And Apple has it for the next 2-5 years (depending on which unreliable corporate shill you happen to believe about the secret details of Apple's deal with ATT).

In the mean time, while Apple makes millions of ATT contracts, the iPod Touch canabalizes iPhone sales, adding an extra shame to ATT and giving excellent market penetration to Apple.

That's the reason for the price drop on the iPhones, people. It wasn't to screw over the Apple faithful, it wasn't just to see if El Jobso could get away with it, it damn sure wasn't because iPhones weren't selling well enough. This is about obtaining a critical mass of market share so that Apple can bring down another unethical, ass-raping, monopolistic bunch of thugs that call themselves businessmen. And it was about doing so while making a profit, like any sensible company does.

This is no hobby. Steve is trying to take over the cell world just like he did the music world. Unless I miss my guess, he is going to succeed.